How does a pure market economy answer the basic question of which goods and services should be produced?(1 point)

Question

Responses

Producers decide what should be produced.
Producers decide what should be produced.

Consumers decide what should be produced.
Consumers decide what should be produced.

The law of supply and demand drives this choice.
The law of supply and demand drives this choice.

The government decides what should be produced.

Answer 1

In a pure market economy, the correct response to the question of which goods and services should be produced is:

The law of supply and demand drives this choice.

In this system, producers and consumers interact, and their preferences and purchasing decisions determine what gets produced based on what people are willing to buy and at what prices.